- Cashless retail grew 18% year on year
- After a surge in November and drop in December, January saw growth
- The "feared slowdown" as we enter 2021 has not eventuated
Australians are tapping and going like never before, according to NAB‘s cashless retail sales index, which rose 18.1% in the year to January 2021.
After a stunning November (where cashless retail grew 7.1% in a month), the rate fell back in December (-4.1%) but has since picked up in the New Year.
“January’s cashless retail result represents respectable growth (up 1.5% m/m on our forecast of the ABS measure), following significant volatility late last year,” said Chief Economist, Alan Oster.
“It is fair to say that these results further underline our view that the Australian economy starts 2021 in an enviably strong position, particularly given global events. While there have been several small (so far) quarantine outbreaks this year, Australia’s control of coronavirus has allowed consumers to have the confidence to spend on retail.”
The volatility in November and December seem to have been caused by the loosening of lockdown restrictions in Melbourne, combined with an early Christmas spending splurge brought forward by the Black Friday and Cyber Monday sales.
“In aggregate terms, the retail sector has seen higher spending since the pandemic began, although spending has been unevenly distributed and at times quite volatile,” said Oster.
“The composition of retail spending has also changed, with household goods, department stores and other retail strong performers, while cafes, restaurants and takeaways (which was the consistently strongest performer in the index) and clothing and footwear continue to struggle.
“Western Australia is the fastest-growing state, with cashless retail sales up over 23% year on year. while Queensland and South Australia share equal second place. (up just under 20%), followed by Victoria (18.1%) and New South Wales on 16.9%.”
This data backs up the recent ABS findings that retail sales volumes were up 2.5% for December quarter 2020, with year on year volumes up 6.4%.
As the NAB report concludes, if you take this information together with the NAB Monthly Survey, it suggests the “slowing in the new year momentum we feared has not come to pass at this stage.”
Source: NAB Cashless Retail Index, January 2021.